Low fuel prices help easyJet recover from terror attacks
EasyJet estimates it will save between £165 million and £180 million on fuel this year compared to 2015 following a fall in global oil prices.
In its first quarter trading statement released today, the airline admitted its earnings in November and December were hit by the forced suspension of flights to Sharm el Sheikh and the Paris terrorist attacks , but it said forward bookings for the second quarter were showing a ‘marked improvement’.
The cancellation of flights to Sharm impacted revenue per seat by 1.5% while fall-off in demand following the Paris terrorist attacks impacted revenue per seat by 2%.
The carrier’s overall revenue per seat was down 3.7% during the first quarter, although total revenue was only down 0.1% at £930 million due to higher loads and negative foreign exchange movements.
Passenger numbers increased 8.1% to 16.1 million and capacity grew 7.3%. The airline’s load factor improved 0.6% to 90.3%.
The airline said cost per seat fell 3.7% ‘as a result of robust management action and acceleration of the delivery of cost improvement plans’.
However, easyJet also acknowledged that it had benefited from lower fuel prices. Cost per seat excluding fuel increased 1.3% which, it said, was better than expected.
The airline secured credit ratings at the beginning of this month from Moodys and Standard & Poors and announced a £3 billion Euro Medium Term Note Programme, which it said would make it easier to secure new sources of funding.
"As a result of the robust cost performance, low fuel price, disciplined capacity allocation and resilient trading, the Board’s expectations for profit before tax for the year to 30 September 2016 remains in line with market expectations," it said.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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